First off, it’s great; it doesn’t claim all the answers but it probes in all the right places. And for whatever reason I was thinking about this a lot over the weekend, and you should totally read Bud’s piece first, because this is my take, and there are a bunch of synergies.

1. We do not need more web shops.

Now, I say that with a lot of friends running their own places, so let me qualify that statement. Most companies only need some simple hosting, a WordPress install, and should spend the majority of their money on design. To saddle people with cumbersome, proprietary content-management systems and code re-written from the ground up when someone else’s plugin will do exactly what you want is morally bankrupt.

On top of that, it can be done more cheaply and to a reasonable level of quality for around US$20 an hour. Sad for some, but it is the modern equivalent of the industrial revolution. And the money is best spent elsewhere.

2. This is “elsewhere”.

Content. Content content content. I recently did an audit for a company and came out of it with the exact thing I expected: they didn’t give their customers anything other than coupons, so subsequently that’s all they talked about.

3. Everything gets easier.

This is the biggest truism, and it exists as uch inside the ad industry as it does outside it: everything, I do not care what it is, will get easier. It will happen in manufacturing as much as it will happen with technology, so companies whose existence relies on technology have but one choice: to make problems that are difficult easy for the people facing them.

Agencies with big technical production capabilities need to send the work out to be done more cheaply, take the best and brightest they have and remake that department as a research & development arm. There is no reason Foursquare could not have been created by Zagat’s; but nobody was working on that kind of problem. Not hard enough anyway. The digital shops need to go back to their engineering roots; they need to sit a bunch of curious minds from across the board together and be inventors; that work is far too important to leave to agencies – and they’re not going to do it anyway.

4. No points for second place.

One of Al Ries‘ 22 Immutable Laws of Marketing said it was better to be first in a new category than 2nd in an old one; that is basically positioning but it speaks to a fundamental truth: marketers need to stop inventing problems for products to solve and focus on creating products that get back to the existing ones, which I suppose just echoes what I said in point 1 more generally. And particularly in the CPG space, they need to udnerstand the conversation around the product is always more interesting than the product itself (e.g. baby formula or parenthood? Which is more interesting?).

5. What we used to call digital will lead, and it won’t survive without traditional talent.

Bear with me: it doesn’t make sense to talk about “digital” anymore, it’s too ubiquitous to mean anything. What we’re really looking at is a kind of “curation of connections”, which happen in various places. Great strategists can lead that, but they’re going to need content produced – and occasionally a short, branded spot or a still image. One thing traditional advertising still has over new media is the ability to tell a story in a heartbeat; we’ll always need that sort of eye, but there’s no longer any reason for it to lead, its importance is decreasing by the day.

6. This only applies to the companies that don’t create true value.

Apple, Zappos, and the other handful of brands that create products and services so compelling they don’t need to market the way everyone else does are going to continue to chart their own course. Long term, companies are better off focusing on that than trying to advertise their way into people’s wallets, as that stops working the second the ad stops.

So, in summation: the agency will be replaced by strategists defining touch points and curating content for those points, and that can be a 3rd party or it can be a savvy brand manager. Regardless of who it is, a lot of people currently in agency land are simply not capable of that. It isn’t a sell, it’s leading by being meaningful, and advertising just isn’t good at that.

Web shops who want to remain web shops need to use the cheapest technologies available, and make their own approach more turn-key. If they don’t, they will lose out to overseas suppliers who can do it all cheaper (and likely faster). The whole notion of a “digital” agency needs to be ditched, we’re talking user-experience and connections, regardless of whether that happens virtually or in the real world. The shops who don’t want to do that need to be inventors.

And brands that don’t want to deal with either need to create products so compelling and in-tune with their customer base they largely sell themselves. Advertising was always the price you paid for being boring, and shortly it may not be a price you can pay at all.

JP Morgan’s Imran Khan (different Imran Khan) is tipping online display advertising to grow this year by around 10.5%. Which is obviously massive. He also cites a few trends that seem to be moving the industry away from naff executions – aka the banners that neither you nor I ever click on. Which, let’s be honest, is all of them. He is talking though of a trend more towards what Banner Blog exists to share with us, which is great.

That’s not what I want to talk about though. In the same article Khan talks about mobile growing 45% (!!!) this year, winding up with $3.2 billion spent on SMS, $253 million in mobile display, and $321 million in mobile search.

A few things:

As the mobile platform improves, the notion of display as distinct on mobile from PC will disappear

It will however give way to services sensitive to your platform and do other interesting things around location, and device-specific functionality

I don’t understand what constitutes “mobile search” – maybe someone can explain it to me?

Advertisers who invade the phone like they have every other medium are going to get smacked; it’s still too personal

Aside from all of this, it’s the same Mcluhan-esque mistake (slide 44) made in online advertising where we take what we did before and force it into this new shape because we don’t know any better. If anyone truly believes the best way to use a mobile phone is to send people SMSs, they deserve the rapid demise their business will receive.

Frankly it speaks to the lack of vision and general laziness that pervades the entire ad industry. With the simple days of TVCs and print long behind it, rather than thinking about how it can reinvent itself to be relevant in a new era, it consistently mines tired ideas that speak to the silo-mentality of 20th century media.

People, look at foursquare, get in and use it for a few weeks. That, right there, is a perfect storm of local marketing, small business marketing, and mobile. If you do not see it, either try harder, or find a job where you do not need to.

I’ve been thinking a lot about The Three Musketeers – my framework for business models which places them (perhaps overly simply, but simply none the less) into two baskets: All-For-One (self-serving pursuit of value) or One-For-All (pursuit of value for an ecosystem). The former is business as usual up until the advent of Google, at which point things seem to turn, and we see more and more businesses cropping up and being successful by creating value

I had, for the longest time, felt uneasy about Facebook. My sense was that it was founded with All-For-One principles, and I have a hard time viewing it as a business that seeks to create value for an eco-system; it is, to my mind, the second coming of Microsoft rather than the second coming of Google.

I say that, but I also now can’t help but acknowledge the market they have developed for small and local businesses to target customers, and the platform they have provided for brands to interact on a more personal level with fans. In some ways, it lessens the role of the ad industry, which to my mind has a hard time justifying itself as even remotely One-For-All, and so can only be viewed as a good thing.

Once, banks held debt till maturity. The great unnovation was being able to sell it to the next guy, who sold it to the next guy, and on and on and on. What was once a simple, short value chain lengthened to the point of absurdity. Exactly the same value chain pattern is surfacing in media. Ads used to be bought and sold through a short value chain. Facebook ended up serving toxic ads because they were sold through lengthening chains of intermediaries — each of whom shifts the buck to the next guy.

The argument does and doesn’t hold water in places – to my mind it swerves dangerously close in places to the kind of opinion that states ISPs are responsible for their customer’s illegally downloading music. The overall point stands however, which is sacrificing the end-user for the man with money is a short-sighted strategy.

We need to spend more time creating things that user wants in the first place.

I’ve spent the last couple years talking about intent in various guises. Sometimes related to marketing, sometimes to business, but always, always at the heart of what anyone is doing. It has become an intrinsic part of what I write about, as anyone who has been with me for a little while will attest.

In February 2008 I penned a piece looking at Facebook’s advertising ecosystem (things have changed dramatically since) and referenced a piece by your friend and mine Doc Searls on The Intention Economy. This phrase showed up again in a presentation I did called Digital Strangelove, and I realised just today, after stumbling across Doc referencing that presentation (tremendous honour and incredibly humbling) that despite spending a long time making sure the appropriate references were in place and credits given, I had not tipped my hat to Doc and his original article which clearly made an impression on me.

Thankfully the medium within which we work allows for easy retraction, correction and re-dissemination of correct information – if we choose to take advantage of it. I have updated my deck with a link to Doc’s original piece in the credits, and wanted to take the time to acknowledge the source of that phrase. Additional credit I can only add by stealing from Sir Isaac Newton: if I have seen further, it is by standing on the shoulders of giants.

Tomorrow I’m teaching a course at the agency I work at, titled (long before I arrived) “Today’s Digital Consumer”. The first thing I’ll be doing is pulling out “Digital” from the topic heading, which will come as no surprise to anyone who has read Digital Strangelove.

I’m wrestling with theory vs. practice right now though; it could be a very practical talk, or it could be one of big ideas, and I’m not sure where the common ground is. I feel like it’s a moment for practical advice, for saying things people can take away and do. I also feel like advertising spends too much time just doing, and not enough time thinking about how it should be done.

Regardless, I’m thankful to have an audience that stretches across a variety of disciplines, from media planning to print production, and I’m hoping what comes out of it is a practical discussion, a lively debate and some points of view that challenge my own. It isn’t about being right, it’s about being least wrong, and I’m viewing all of this space right now with a smile and a shrug and a sly nod to a future version of myself who is already looking back and saying “Remember when…”

I give advertising a really hard time, partly because I work in it, and partly because it is a collection of some incredibly insightful and creative people who have chosen to try and sell more soup. I know soup needs to be sold, but I feel like after 8000 or so years of it, soup’s proposition is fairly well established.

Imagine my surprise when I found myself loving the below TED Talk from Rory Sutherland, Vice-Chairman and Executive Creative Director of Ogilvy UK. I originally found it via the newly-discovered (by me) brilliance of Simon Kemp, and after bristling self-righteously that someone would argue for perceived value instead of actual value, I found myself giggling at Rory and remarking to a friend how insightful he was; his delivery is so desperately English, I love it.

Watch and enjoy.

*Update* The afore-mentioned brilliant Simon Kemp is also sharp and posted a link to a Q&A done with Rory after the talk he gave.

A few years back I did a consulting gig on a print directory service everyone is familiar with. The project looked at how digital media was changing the landscape they existed in and they were interested in finding out how they could continue to be profitable while these changes happened. In the end the recommendation was to ensure migration from the offline service to the online one, and involved a strategy for doing so. Having delivered the final report however, the response came back stating their print directory represented X-million dollars of revenue so they expected it to still be a thriving business in years to come, regardless of what we had to say.

No prizes for guessing how that turned out.

I was reminded of this when I got home one day last week to see the below in the lobby of the building I’m living in at the moment.

Now, Yellow Pages wasn’t the company so desperate to display their desire to stick their head into the sand, however they must, at some point, have had someone have a similar conversation with them. Three years ago when I was doing that project I stood in the middle of my agency and asked the entire office who had used a print directory in the last 6 months. Unless I was willing to accept “door stop” as an appropriate use, I had nothing.

It used to be if you weren’t in the Yellow Pages you didn’t have a business. Now it’s a matter of being on Google‘s pages, and you best make sure its the first one. If I was advising a company still advertising in the Yellow Pages, I would tell them to take that spend and invest it in SEO, optimising its site for core competancies and locality.

Understand I don’t think it is a good thing that a once proud business is dying, but few things are more Darwinian than business itself; ignorance should not be rewarded, nor should an inability or unwillingness to change with the times.

Ok maybe not that drastic, as Microsoft and Google already play in each other’s spaces, what I find interesting is each company’s desire to innovate in the other’s space, potentially at the expense of the things that got them to where they are.

I have a number of clients at Microsoft and I like to think I challenge them regularly to try and build new markets as opposed to steal other people’s; if Google is going down the same path then that disappoints me greatly. What I do find interesting about the above scenario though is Google’s new email idea, called Wave, doesn’t seem to have monetisation built into it beyond advertising, whereas Microsoft are obviously making a big bet on increasing search revenue via Bing, their new search engine.

Google’s play seems to be closer to an idea where everything is contained in a single space, a move I like, away from distinct destinations. Much like Facebook, they’re seeking a single dashboard from which they can control a user’s experience. Microsoft meanwhile are chasing a better mouse trap. It could potentially be a more lucrative mouse trap, but I don’t think it aligns with where user bahviour is going.

Digital strategy is a business decision, not a marketing decision. That doesn’t mean your marketing team shouldn’t be in the room, it means everyone else should be there with them.

Julian Cole wrote a piece a few months back saying “Don’t trust an agency with your digital strategy.” It does then beg the question (if I may, for a moment, speak client-side) “Then whom shall I trust in your festering cesspool of sharks, narcissists and hopeless egomaniacs?

Good question.

A single unit needs to own a company’s strategy, and they need to be able to talk about each channel with authority. That sounds like a no-brainer I know, so I’m going to put this out there and see how it feels: you won’t find it anywhere where the last name of an ad giant from yester-year hangs their name on the front door. That isn’t because they don’t have intelligent folk from all disciplines working for them, that is because their business models and internal practices will not permit the structural changes required to achieve genuine innovation and next-generation creativity for their client’s businesses, let alone their own.

I can’t say I know all of the answers, or even any of them. But not enough people are asking the question. Or questions; you can phrase them in a myriad of ways, let’s maybe start with something like this: why does Clemenger BBDO in Melbourne now have four people in its planning department, none of them digital natives? Tim, who worked there as a member of the planning team up until a week ago, had this to say:

I’ve been arguing for a long time now that as product, advertising, sales and service, all get closer together, advertising agencies really need to become creative marketing consultancies…some drastic restructuring needs to take place.

Drastic restructuring then did take place, though perhaps not along the lines he was thinking.

David Armano has talked about a move away from the silver bullet, much like Tim has. I took a personality test recently that told me I rated close to 0 when it came to perfectionism, but was a polar opposite when it came to creativity and a love of thinking. Call me biased (I won’t argue), but that sounds like something very different to where we’re currently at, and given that test it is no wonder I’m a fan of this new direction. I’m also a fan of offering substance, something advertising doesn’t do very well at all.

I’ve talked a lot about intent, and I think this chart speaks to the heart of the same thing I’m on about. It is also the same thing Seth Godin means when he says the following:

Persistence isn’t using the same tactics over and over. That’s just annoying.

I call it intent, and when I talk about it, I talk about constanty refining the work we’re doing to ensure the outcome is matching the intent; if it isn’t we change it until it is.

Intent is at the heart of everything we do, and the group that owns your strategy should have it etched onto their brains, directing nothing less than strategy that delivers the intended result tomorrow better than it did today. Starting here I’m advocating a move away from the single-minded proposition to the statement of intent; it is fluid and flexible, and it ensures the goal is forever just over the horizon. It will keep you and your organisation passionate and motivated and restless.

There’s this age old idea that people got into advertising who wanted to make movies, the same way every journalist is supposedly a frustrated novelist. I’m sure it is true for some, and entirely not true for many. My friend Matt used to be a journalist and now works in advertising, he might have something interesting to say there (he usually does).

There’s a distinction, an important one I think, between people wanting to make movies and people wanting to tell stories. I’m wondering if advertising always has to tell stories, at least, needs to tell them in a traditional sense. One thing I think old media advertising did and still does much better than digital is deliver a whole story in just a single image and a bit of copy. We can argue until the cows come home that that isn’t the point any more, but that’s for another post.

In writing this I’ve been thinking about ads that have conveyed a story for me, and particularly ones that didn’t have narrative at their core, but still managed to tell us a whole lot. Take for example one of my favourite commercials ever (yes, forever-ever, forever-ever):

There’s a whole lot of story going on here, it isn’t just five guys goofing off with each other. The bikes hanging up in the first apartment, the cut to Dookie who is clearly the rennaissance man of the bunch, left-handed and a gamer, at the end we’re even shown it’s winter outside. We could make some guesses around the character archetypes employed to bring the story to life, but we’ve already got a variety of things to work with, and in a transmedia environment there’s a lot of fun to be had very quickly, and very easily.

Another commercial that only came out this year that I loved was this one from HSBC:

What did you think? One colleague I showed it to said it made him angry, he really got worked up by it. I thought it was great though, brilliantly executed to deliver a very particular point – and in delivering a point we get to the heart of narrative in traditional advertising.

Advertising, in telling a story, requires a very specific emotion or lesson to come out of the narrative in order for the brand’s proposition to connect with the audience; if there’s ambiguity it falls flat, it only works if it can’t be easily refuted, and that’s really, really hard to do. With this in mind they have more in common with Hans Christian Anderson than they do with The Amazing Adventures of Kavalier and Clay (great book, read it), stories employed to deliver a very particular point, constructed from very simple devices to make the re-telling as simple and easy as possible, which is why when I get around to having kids they’re still going to be hearing about Hansel and Gretel, even though I’d much rather be telling them about Han Solo and Chewie.

This is getting a bit long, so I’m going to split this into two sections as I still want to talk about ambiguity and how it works in favour of the story when done right (it’s more interesting than it sounds, I promise). To whet the appetite, if you haven’t seen the HBO Voyeur site, then that is homework.

Meanwhile, what’s your favourite example of a linear story in advertising?

**Update** October 29th, 2008

Watch the Budweiser guys get resurrected in this pseudo-spot for Barack Obama. This is now a meme as much as it was ever a commercial, which means the fun is only just getting started.